The acquisition of AIR Communities marks Blackstone’s largest acquisition in the multifamily sector and shows its bullishness on rental housing and a sentiment that the commercial market may be bottoming out.
Attend Inman Connect in Las Vegas July 30-August 1! Seize the moment and take control of the next era of real estate. Through immersive experiences, innovative formats and an unparalleled lineup of speakers, this gathering becomes more than just a conference, it becomes a collaborative force shaping the future of our industry. Hurry and grab your tickets!
Alternative investment manager Blackstone showed confidence in multifamily housing with a $10 billion acquisition of the owner of an upscale apartment complex, wall street journal reported on Monday.
The acquired entity is Apartment Income REIT, also known as AIR Communities, which owns 76 rental communities, primarily in coastal markets such as Miami, Los Angeles and Boston. Blackstone reportedly intends to spend an additional $400 million to improve the properties.
The acquisition marks Blackstone’s largest acquisition in the multifamily sector and shows optimism about rental housing and a mindset that the commercial market may be hitting a bottom.
“We can see the backbone of the real estate recovery taking shape,” Blackstone Group President Jonathan Gray said on an earnings call earlier this year. “Of course, we won’t wait for clear signals and we believe the best investments are made in uncertain times.”
Blackstone will acquire AIR Communities in an all-cash transaction for $39.12 per share, a premium of approximately 25% to the company’s closing price as of Friday. The acquisition, through Blackstone’s $30.4 billion global real estate fund, is expected to close in the third quarter.
The company sees January quarter earnings fall Profits fall as real estate investments fall in value. Net profit fell to US$151.8 million from US$557.9 million the previous year, and the value of its two major real estate investments fell by 3.8% and 4.6% respectively.
In recent months, Blackstone has begun increasing its investments in commercial real estate, assuming interest rates may stabilize and capital flows more freely.
In December 2023, the company received nearly $17 billion Signature Bank portfolio.It is also related to digital real estate Around that time, we will build a new enterprise to spend $7 billion developing data centers targeting the largest providers of online content, cloud services and artificial intelligence.
Blackstone also announced in January its $3.5 billion acquisition of Tricon Residential, an owner, operator and developer of a portfolio of approximately 38,000 single-family rental homes in the United States.
Get Inman’s Real Estate Portfolio Newsletter Delivered directly to your inbox. A weekly digest of all the biggest real estate investing and property management news, published every Tuesday. Click here to subscribe.
Email Lillian Dixon
